Inside energy storage's tax incentive campaign

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Quick Fix

— The energy storage industryis hungry to expand, and the sector has found success in Washington by downplaying its green credentials.

— The Interior Department is losing another top officialwith the surprise announcement that Joe Balash, the assistant Interior secretary for land and minerals, will resign at the end of the month. Balash was a key player in the administration's push to expand Arctic drilling, an effort now under investigation by House Democrats.

— Amid blowback from farmers over the administration's exemption of 31 small refiners from biofuel requirements, a freshman Iowa Democrat will request an inspector general investigation.

HAPPY WEDNESDAY! I’m your temporary host, Alex Guillén. Congratulations to Ben Salisbury of Height Capital Markets for correctly naming Kansas State as the first land-grant university designated after passage of the Morrill Act of 1862. Today’s trivia question comes from “Delaware Trivia,” a very real book your fill-in host owns. What was the only Revolutionary War skirmish fought on Delaware soil? Bonus points if you can also name the historical first believed to have happened at that event. Send your legit news and hot goss to aguillen@politico.com.

Driving the Day

INSIDE THE CAMPAIGN FOR ENERGY STORAGE TAX INCENTIVES:Energy storage may be a key component of fighting climate change and boosting renewables, but that's not the sales pitch the industry is making around Donald Trump's Washington, Pro’s Gavin Bade reports. While energy storage has long been a component of smoothing out intermittent sources like solar and wind, the nascent but burgeoning industry has secured bipartisan support in part by downplaying its clean energy bona fides.

I think energy storage can help get us to 100 percent renewables. I'm just not making the argument directly about moving to 100 percent renewables. It's not my job.

Kelly Speakes-Backman, CEO of the Energy Storage Association

What a sector wants: The industry is hoping to significantly expand an investment tax credit to get the kind of federal assistance wind and solar received. The U.S. deployed 311 megawatts of energy storage in 2018. That's only about the size of a small gas plant, but analysts at Wood Mackenzie expect that total to more than double again this year. By 2025, they expect the U.S. storage sector — worth about $1 billion today — to near a $5 billion market.

People on the Move

BALASH BOUNCES:Joe Balash, the assistant Interior secretary for land and minerals, will resign from the Trump administration, Interior Secretary David Bernhardt announced on Twitter on Tuesday evening. Balash has been a key figure in the Trump administration's efforts to clear the way for oil drilling in the Arctic National Wildlife Refuge.

That ANWR effort is now under investigation by House Democrats in the wake of a POLITICO Magazine report of political appointees interfering with the work of career officials analyzing the environmental impacts of opening up the sensitive region. Balash plans to stay in his position through Aug. 30, according to a copy of his resignation letter posted by Alaskan reporter Nat Herz.

Biofuels

WOUND UP OVER WAIVERS: EPA's internal watchdog is being asked to determine how the agency decided to grant the vast majority of exemptions from the Renewable Fuel Standard that oil refiners have requested. EPA approved 31 petitions for waivers from the 2018 requirements, while rejecting just six, and corn-state lawmakers have howled at what they see as special favors for the oil industry. Freshman Iowa Democratic Rep. Cindy Axne (D-Iowa) today will call for an inspector general investigation into how EPA decided to expand the number of waivers it issued since Trump came into office. She will hold her press conference at Southwest Iowa Renewable Energy, an ethanol producer in Council Bluffs, Iowa, the same plant where Trump touted his action expanding sales of 15 percent ethanol.

Trump wants backsies:Trump is seeking to mollify corn farmers who are furious at the waivers, according to a Reuters report Tuesday. He personally approved EPA's decision to go ahead with the 31 waivers earlier this month, but in a two-hour-long Cabinet meeting, Trump told his staff to figure out a way to pacify the farmers. According to a refinery industry source, the president asked EPA Administrator Andrew Wheeler if he could take the exemptions back and was told he could not.

EPA says no harm, no foul: Citing data from the Energy Information Administration, EPA said the U.S. had been setting records for both ethanol production and exports. "There is zero evidence that EPA’s congressionally mandated small refinery exemption program, which provides regulatory relief to small refineries around the country, has had any negative impact on domestic corn ethanol producers," EPA spokesman Michael Abboud said in a statement. EPA says it follows a process prescribed by law in granting the waivers.

Nonetheless, POET, the largest U.S. ethanol producer, said Tuesday it idled an Indiana plant due to the waivers. "Our industry invested billions of dollars based on the belief that oil could not restrict access to the market and EPA would stand behind the intent of the Renewable Fuel Standard," POET CEO Jeff Broin said in a statement. "Unfortunately, the oil industry is manipulating the EPA and is now using the RFS to destroy demand for biofuels."

2020 Watch

HARRIS, CASTRO JOIN CLIMATE FORUM: Sen. Kamala Harris and Julián Castro will both attend the CNN climate forum on Sept. 4, bringing the total attendees to 10. Harris at first said scheduling conflicts (reportedly fundraisers) prevented her attendance, but her campaign on Tuesday confirmed she made the time. “We were happy to change our schedule to accommodate such a critical conversation,” spokeswoman Lily Adams said.

Castro will also attend after snagging an invite by qualifying for the upcoming Democratic primary debate. An eleventh candidate may make it as well, if billionaire Tom Steyer can secure just one more poll showing him with 2 percent support to qualify for the primary debates.

On the Hill

E&C DEMS QUESTION EPA ON EAB PLANS: House Democrats are demanding EPA explain reported planned changes to its Environmental Appeals Board, a panel of administrative law judges who hear challenges to pollution permits. The New York Times last month reported EPA is considering blocking communities or individuals from challenging permits issued to industry. “Considering the EAB’s impressive track record at resolving disputes, efforts to limit access to the Board or curtail its operations would appear to elevate the priorities of EPA’s current political leadership over the Agency’s mission to protect public health and the environment,” wrote Energy and Commerce Chairman Frank Pallone and Reps. Diana DeGette and Paul Tonko. They requested EPA respond to their questions by Sept. 3.

ROMNEY ‘LOOKING AT’ CARBON DIVIDEND: Sen. Mitt Romney of Utah said this week he's "looking at" a legislative proposal that would impose a carbon tax on major emitters and direct the proceeds to taxpayers and coal communities, Anthony Adragna reports.

Around the Agencies

LABOR IG SAYS MSHA PENALTIES DON’T WORK:The Mine Safety and Health Administration issues monetary penalties all the time, but they do little to improve the risks of injury or death, a new Labor Department inspector general report says. The IG found that MSHA does not assess whether its penalties improve safety — and determined that many mine operators don't clean up their act after paying the fines, Pro’s Ian Kullgren reports. The IG recommended new controls to improve the effectiveness of penalties, but the agency argued it lacks the legal authority to make such changes.

OIL FIRMS FIGHT PIPELINE’S EFFORT TO RECOUP TARIFF COSTS: Two oil companies are asking FERC to stop a pipeline operator from raising prices to recoup the cost of steel tariffs, the latest fallout from the Trump administration's trade war and tariffs on imported steel, Ben Lefebvre reports.

Beyond the Beltway

WASHINGTON — COURT UPHOLDS COAL TERMINAL LEASE REJECTION: A trio of Washington judges on Tuesday upheld the state's decision to deny the lease of state-owned lands for the Millennium Bulk Terminal, which would have shipped Western coal to Asia. The decision creates a major roadblock for any future effort to build the export terminal. The judges said the state's close consideration of the company's financial condition "was especially reasonable given the circumstances" as "coal market conditions were not promising, with U.S. coal production dropping."

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About The Author : Alex Guillén

Alex Guillén is an energy reporter for POLITICO Pro, where he covers EPA, regulations and coal, as well as lobbying and campaign finance in the energy realm. He previously wrote the Morning Energy newsletter. He graduated from the College of William and Mary in Williamsburg, Va., with a degree in anthropology and English. He is an avid reader and TV binger. The Delawarean, thrilled that there are finally Capriotti’s outposts in Washington, lives in Alexandria, Va.